PRO Students Act

I 116TH CONGRESS 1ST SESSION H. R. 3487 To improve the Higher Education Act of 1965, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 25, 2019 Mr. TAKANO introduced the following bill; which was referred to the Committee on Education and Labor A BILL To improve the Higher Education Act of 1965, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Protections and Regulation for Our Students Act’’ or 5 ‘‘PRO Students Act’’. 6 (b) TABLE OF CONTENTS.—The table of contents for 7 this Act is as follows: 8 Sec. 1. Short title; table of contents. Sec. 2. 85–15 revenue source requirement for proprietary institutions. Sec. 3. Definitions. Sec. 4. Restriction on marketing with Federal educational assistance funds. Sec. 5. Whistleblower protections for persons associated with institutions of higher education. VerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\H3487.IH H3487 kjohnson on DSK79L0C42 with BILLS 2 •HR 3487 IH Sec. 6. Establishment of complaint resolution and tracking system. Sec. 7. Proprietary education oversight coordination committee. Sec. 8. Improved determination of cohort default rates; publication of default prevention plan. Sec. 9. Amendments to terms and conditions of borrower defenses. Sec. 10. Improved student loan servicing and debt collection practices. Sec. 11. Improved disclosures, counseling, and financial assistance information for students. Sec. 12. Program participation agreements. Sec. 13. Improved disclosures for clinical training programs. Sec. 14. Civil penalties. Sec. 15. Requirements for accrediting agencies or associations. Sec. 16. Program review and data. Sec. 17. Consumer protections for students. SEC. 2. 85–15 REVENUE SOURCE REQUIREMENT FOR PRO- 1 PRIETARY INSTITUTIONS. 2 (a) CHANGE FROM 90–10 TO 85–15.—Section 3 487(a)(24) of the Higher Education Act of 1965 (20 4 U.S.C. 1094(a)(24)) is amended by striking ‘‘ten percent’’ 5 and inserting ‘‘15 percent’’. 6 (b) REVISIONS TO ACCOUNTING.—Section 487(d)(1) 7 of the Higher Education Act of 1965 (20 U.S.C. 8 1094(d)(1)) is amended— 9 (1) in subparagraph (A), by striking ‘‘account- 10 ing,’’ and all that follows and inserting ‘‘account- 11 ing;’’; 12 (2) in subparagraph (B), by striking clause (iii) 13 and inserting the following new clause: 14 ‘‘(iii) a contractual arrangement with 15 a Federal agency for the purpose of pro- 16 viding job training to low-income individ- 17 uals who are in need of such training;’’; 18 (3) in subparagraph (C)— 19 VerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3487.IH H3487 kjohnson on DSK79L0C42 with BILLS 3 •HR 3487 IH (A) by striking clauses (i) through (iii) and 1 inserting the following new clause: 2 ‘‘(i) grant funds provided by a source 3 that has no affiliation with the institution 4 and shares no employees with the institu- 5 tion;’’; and 6 (B) by redesignating clause (iv) as clause 7 (ii); and 8 (4) by striking subparagraphs (D) and (E) and 9 inserting the following new subparagraphs: 10 ‘‘(D) include no loans made by an institu- 11 tion of higher education as revenue to the 12 school, except for payments made by students 13 on such loans; 14 ‘‘(E) include a scholarship provided by the 15 institution— 16 ‘‘(i) only if the scholarship is in the 17 form of monetary aid based upon the aca- 18 demic achievements or financial need of 19 students, disbursed to qualified student re- 20 cipients during each fiscal year from an es- 21 tablished restricted account; and 22 ‘‘(ii) only to the extent that funds in 23 that account represent designated funds, 24 or income earned on such funds, from a 25 VerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3487.IH H3487 kjohnson on DSK79L0C42 with BILLS 4 •HR 3487 IH source that has no affiliation with the in- 1 stitution and shares no employees with the 2 institution; and’’. 3 (c) EFFECTIVE DATE.—The amendments made by 4 this section shall take effect 1 year after the date of enact- 5 ment of this Act. 6 SEC. 3. DEFINITIONS. 7 (a) IN GENERAL.—Section 103 of the Higher Edu- 8 cation Act of 1965 (20 U.S.C. 1003) is amended— 9 (1) by redesignating paragraphs (4) through 10 (9), (10) through (14), and (15) through (24), as 11 paragraphs (5) through (10), (12) through (16), and 12 (18) through (26), respectively; 13 (2) by inserting after paragraph (3) the fol- 14 lowing new paragraph: 15 ‘‘(4) DEFAULT MANIPULATION.—The term ‘de- 16 fault manipulation’ means engaging in a device or 17 practice, including branching, consolidation of cam- 18 puses, consolidation or manipulation of the identi- 19 fication codes used by the Office of Postsecondary 20 Education to designate campuses and institutions, 21 change of ownership or control, serial forbearance, 22 or any similar device or practice (as determined by 23 the Secretary) when, but for the device or practice, 24 one or more campuses of an institution of higher 25 VerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3487.IH H3487 kjohnson on DSK79L0C42 with BILLS 5 •HR 3487 IH education would be at risk of cohort default rate 1 sanctions under section 435 or student default risk 2 sanctions under section 489A.’’; 3 (3) by inserting after paragraph (10), as redes- 4 ignated by paragraph (1) of this section, the fol- 5 lowing new paragraph: 6 ‘‘(11) FEDERAL EDUCATIONAL ASSISTANCE 7 FUNDS.—The term ‘Federal educational assistance 8 funds’ means any Federal financial assistance pro- 9 vided, under this Act or any other Federal law, 10 through a grant, contract, subsidy, loan, guarantee, 11 insurance, or other means to an institution of higher 12 education, including Federal financial assistance 13 that is disbursed or delivered to an institution or on 14 behalf of a student or to a student to be used to at- 15 tend the institution, except that such term shall not 16 include any monthly housing stipend provided under 17 the Post-9/11 Veterans Educational Assistance Pro- 18 gram under chapter 33 of title 38, United States 19 Code.’’; and 20 (4) by inserting after paragraph (16), as redes- 21 ignated by paragraph (1) of this section, the fol- 22 lowing new paragraph: 23 ‘‘(17) RECRUITING AND MARKETING ACTIV- 24 ITY.— 25 VerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3487.IH H3487 kjohnson on DSK79L0C42 with BILLS 6 •HR 3487 IH ‘‘(A) IN GENERAL.—Except as provided in 1 subparagraph (B), the term ‘recruiting and 2 marketing activity’ means an activity that con- 3 sists of any of the following: 4 ‘‘(i) Any advertising or promotion ac- 5 tivity, including a paid announcement in 6 newspapers, magazines, radio, television, 7 billboards, electronic media, naming rights, 8 or any other public medium of communica- 9 tion, including paying for a display or pro- 10 motion at a job fair, military installation, 11 or postsecondary education recruiting 12 event. 13 ‘‘(ii) Any effort to identify and attract 14 prospective students, directly or through a 15 contractor or other third party, including 16 any contact concerning a prospective stu- 17 dent’s potential enrollment or application 18 for grant, loan, or work assistance under 19 title IV or participation in preadmission or 20 advising activities, including— 21 ‘‘(I) paying employees responsible 22 for overseeing enrollment and for con- 23 tacting potential students in person, 24 by phone, by email, by internet com- 25 VerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3487.IH H3487 kjohnson on DSK79L0C42 with BILLS 7 •HR 3487 IH munications, or by other means, re- 1 garding enrollment; 2 ‘‘(II) compensating a person to 3 provide to an institution of higher 4 education contact information regard- 5 ing prospective students, including in- 6 formation obtained through websites 7 established for such purpose; and 8 ‘‘(III) providing funds to a third 9 party to create or maintain a website 10 for the purpose of obtaining contact 11 information regarding prospective stu- 12 dents. 13 ‘‘(iii) Any other activity as the Sec- 14 retary may determine. 15 ‘‘(B) EXCEPTION.—An activity that is re- 16 quired as a condition of receipt of funds by an 17 institution under title IV, or under another ap- 18 plicable Federal law, shall not be considered to 19 be a recruiting and marketing activity under 20 subparagraph (A).’’. 21 (b) TITLE IV PROGRAMS.—Section 481 of the Higher 22 Education Act of 1965 (20 U.S.C. 1088) is amended by 23 adding at the end the following new subsection: 24 VerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3487.IH H3487 kjohnson on DSK79L0C42 with BILLS 8 •HR 3487 IH ‘‘(g) STUDENT DEFAULT RISK.—In this title, the 1 term ‘student default risk’ means the percentage that is 2 calculated by taking an institution’s cohort default rate 3 (as defined in section 435(m)) for the most recent fiscal 4 year available, and multiplying it by the percentage of stu- 5 dents enrolled at such institution receiving a loan made, 6 insured, or guaranteed under this title during the previous 7 academic year.’’. 8 SEC. 4. RESTRICTION ON MARKETING WITH FEDERAL EDU- 9 CATIONAL ASSISTANCE FUNDS. 10 (a) REPEAL OF EXISTING PROVISION.—The Higher 11 Education Opportunity Act is amended by striking section 12 119 (20 U.S.C. 1011m). 13 (b) INSERTION IN HIGHER EDUCATION ACT OF 1965 14 AND AMENDMENTS.—Part B of title I of the Higher Edu- 15 cation Act of 1965 (20 U.S.C. 1011 et seq.) is amended 16 by adding at the end the following new section: 17 ‘‘SEC. 124. CERTIFICATION REGARDING THE USE OF CER- 18 TAIN FEDERAL FUNDS AND RESTRICTIONS 19 ON SOURCES OF FUNDS FOR RECRUITING 20 AND MARKETING ACTIVITIES. 21 ‘‘(a) PROHIBITION.—No Federal funds received 22 under this Act by an institution of higher education or 23 other postsecondary educational institution may be used 24 to pay any person for influencing or attempting to influ- 25 VerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3487.IH H3487 kjohnson on DSK79L0C42 with BILLS 9 •HR 3487 IH ence an officer or employee of any agency, a Member of 1 Congress, an officer or employee of Congress, or an em- 2 ployee of a Member of Congress in connection with any 3 Federal action described in subsection (b). 4 ‘‘(b) APPLICABILITY.—The prohibition in subsection 5 (a) applies with respect to the following Federal actions: 6 ‘‘(1) The awarding of any Federal contract. 7 ‘‘(2) The making of any Federal grant. 8 ‘‘(3) The making of any Federal loan. 9 ‘‘(4) The entering into of any Federal coopera- 10 tive agreement. 11 ‘‘(5) The extension, continuation, renewal, 12 amendment, or modification of any Federal contract, 13 grant, loan, or cooperative agreement. 14 ‘‘(c) LOBBYING AND EARMARKS.—No Federal stu- 15 dent aid funding under this Act may be used to hire a 16 registered lobbyist or pay any person or entity for securing 17 an earmark. 18 ‘‘(d) RESTRICTIONS ON SOURCES OF FUNDS FOR RE- 19 CRUITING AND MARKETING ACTIVITIES.— 20 ‘‘(1) IN GENERAL.—An institution of higher 21 education, or other postsecondary educational insti- 22 tution, may not use revenues derived from Federal 23 educational assistance funds for recruiting or mar- 24 keting activities. 25 VerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3487.IH H3487 kjohnson on DSK79L0C42 with BILLS 10 •HR 3487 IH ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 1 this section shall be construed as a limitation on the 2 use by an institution of revenues derived from 3 sources other than Federal educational assistance 4 funds. 5 ‘‘(3) REPORTS.—Each institution of higher 6 education, or other postsecondary educational insti- 7 tution, that derives 65 percent or more of revenues 8 from Federal educational assistance funds shall re- 9 port annually to the Secretary and to Congress and 10 shall include in such report— 11 ‘‘(A) a statement of the institution’s ex- 12 penditures on advertising, marketing, and re- 13 cruiting; and 14 ‘‘(B) a verification from an independent 15 auditor that the institution is in compliance 16 with the requirements of this subsection. 17 ‘‘(e) CERTIFICATION.—Each institution of higher 18 education or other postsecondary educational institution 19 receiving Federal funding under this Act, as a condition 20 for receiving such funding, shall annually certify to the 21 Secretary of Education that the requirements of sub- 22 sections (a) through (d) have been met. 23 ‘‘(f) ACTIONS TO IMPLEMENT AND ENFORCE.—The 24 Secretary shall take such actions as are necessary to en- 25 VerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3487.IH H3487 kjohnson on DSK79L0C42 with BILLS 11 •HR 3487 IH sure that the provisions of this section are implemented 1 and enforced.’’. 2 SEC. 5. WHISTLEBLOWER PROTECTIONS FOR PERSONS AS- 3 SOCIATED WITH INSTITUTIONS OF HIGHER 4 EDUCATION. 5 (a) WHISTLEBLOWER PROTECTION PROGRAM.—Title 6 I of the Higher Education Act of 1965 is amended by in- 7 serting after section 123 (20 U.S.C. 1011l) the following 8 new section: 9 ‘‘SEC. 124. PROTECTION FROM RETALIATION FOR DISCLO- 10 SURE OF CERTAIN INFORMATION BY PER- 11 SONS ASSOCIATED WITH INSTITUTIONS OF 12 HIGHER EDUCATION. 13 ‘‘(a) PROHIBITION OF RETALIATION.— 14 ‘‘(1) IN GENERAL.—An institution of higher 15 education participating in programs under title IV 16 (in this section referred to as an ‘institution’) may 17 not discharge, demote, or otherwise discriminate 18 against any person as retaliation for— 19 ‘‘(A) such person disclosing to an indi- 20 vidual or entity described in paragraph (2) in- 21 formation such person reasonably believes evi- 22 dences a violation of any law, rule, or regulation 23 by the institution; or 24 VerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3487.IH H3487 kjohnson on DSK79L0C42 with BILLS 12 •HR 3487 IH ‘‘(B) assisting a person disclosing such in- 1 formation or providing information or docu- 2 ments for use in disclosing such information. 3 ‘‘(2) INDIVIDUALS AND ENTITIES COVERED.— 4 The individuals and entities described in this para- 5 graph are: 6 ‘‘(A) A Member of Congress or a rep- 7 resentative of a committee of Congress. 8 ‘‘(B) An Executive agency (as defined in 9 section 105 of title 5, United States Code). 10 ‘‘(C) The Government Accountability Of- 11 [Text truncated for display. 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